Entertainment

Is WallStrip’s Cancellation an Omen for Original Online Video?

Just 18 months ago, WallStrip represented the ideals of all that was possible in new media. A small startup producing a daily online video show and leveraging social media for distribution was sold to CBS for a rumored $5 million, just over a year after launching. But today, CBS is halting production on the show, according to a report from PEHub.

The media company is spinning the news by claiming they plan to “take the DNA from WallStrip and apply it” to other online properties. And maybe that’s true, and we’ll see host Julie Alexandria pop up on other CBS content produced for online audiences. But the fact that WallStrip – a show targeted at one of the most lucrative demographics out there (Wall Street investors) – couldn’t survive despite the backing of one of the world’s largest media companies paints a gloomy picture for the medium.

Of course, the cancellation of WallStrip could be a one-off – a show that focuses on soaring stocks doesn’t work so well when the stock market is tanking, as The New York Times notes. But I’m guessing we’ll see similar announcements soon from others ; the most visible player in the original Web programming space, Revision3, has already announced layoffs and the cancellation of several shows.

The problem here is a simple economic one: though relatively inexpensive to produce and distribute (compared to network or cable TV), the costs of professionally produced online video are exceeding the revenue being generated by ads. And that’s a problem that’s not likely to be solved soon between the economic slowdown and the fact that the revenue that’s out there is flowing towards big media content being re-purposed for the Web. In fact, despite being 20x smaller in terms of video views, some estimates have Hulu catching up to YouTube in revenue this year.

Will we still see individuals making a living from compelling online video that spreads virally? Absolutely. But the economics of trying to re-create the network television experience on the Web are quickly falling apart, and unless either the audience suddenly surges or the ad market quickly pulls a 180, WallStrip’s demise could just be a sign of what’s to come.

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